EXHIBIT 1.2
▇▇▇▇▇▇▇ ▇▇▇▇ & COMPANY
A Division of
[LOGO] ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
March 25, 1998
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President
Pulaski Bank, A Federal Savings Bank
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▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇:
This proposal is in connection with Pulaski Bancshares, M.H.C. (MHC) and Pulaski
Bank, A Federal Savings Bank's (the "Bank") intention to have its parent mutual
holding company convert from a mutual to a capital stock form of organization
(the "Conversion"). In order to effect the Conversion, it is contemplated that
all of MHC's common stock to be outstanding pursuant to the Conversion will be
issued to a new holding company (the "Company") to be formed pursuant to the
Conversion, and that the Company will offer and sell shares of its common stock
first to eligible persons (pursuant to the Plan of Reorganization) in a
Subscription and Community Offering, (MHC, the Bank and the Company will
collectively be known as "Client".)
▇▇▇▇▇▇▇ ▇▇▇▇ & Company, a Division of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. ("KBW"),
will act as the Client's exclusive financial advisor and marketing agent in
connection with the Conversion. This letter sets forth selected terms and
conditions of our engagement.
1. Advisory/Conversion Services. As the financial advisor and marketing
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agent, KBW will provide the Client with a comprehensive program of conversion
services designed to promote an orderly, efficient, cost-effective and long-term
stock distribution. KBW will provide financial and logistical advice to the
Client concerning the offering and related issues. KBW will assist in providing
conversion enhancement services intended to maximize stock sales in the
Subscription Offering and to residents of the Client's market area, if
necessary, in the Community Offering.
KBW shall provide financial advisory services to the Client which are typical in
connection with an equity offering and include, but are not limited to, overall
financial analysis of the Client with a focus on identifying factors which
impact the valuation of the common stock and provide the appropriate
recommendations for the betterment of the equity valuation.
________________ Investment Bankers and Financial Advisors___________________
211 Bradenton * ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ * ▇▇▇-▇▇▇-▇▇▇▇ * Fax: ▇▇▇-▇▇▇-▇▇▇▇
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March 25, 1998
Page 2 of 5
Additionally, post conversion financial advisory services will include advice on
shareholder relations, NASDAQ listing, dividend policy (for both regular and
special dividends), stock repurchase strategy and communication with market
makers. Prior to the closing of the offering, KBW shall furnish to client a
Post-Conversion reference manual which will include specifics relative to these
items. (The nature of the services to be provided by KBW as the Client's
financial advisor and marketing agent are further described in Exhibit A
attached hereto.)
2. Preparation of Offering Documents. The Client and their counsel will draft
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the Registration Statement, Application for Conversion, Prospectus and other
documents to be used in connection with the Conversion. KBW will attend
meetings to review these documents and advise you on their form and content. KBW
and its counsel will draft appropriate agency agreement and related documents as
well as marketing materials other than the Prospectus.
3. Due Diligence Review. Prior to filing the Registration Statement,
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Application for Conversion or any offering or other documents naming KBW as the
Client's financial advisor and marketing agent, KBW and their representatives
will undertake substantial investigations to learn about the Client's business
and operations ("due diligence review") in order to confirm information provided
to us and to evaluate information to be contained in the Client's offering
documents. The Client agrees that it will make available to KBW all relevant
information, whether or not publicly available, which KBW reasonably requests,
and will permit KBW to discuss with management the operations and prospects of
the Client. KBW will treat all material non-public information as confidential.
The Client acknowledges that KBW will rely upon the accuracy and completeness of
all information received from the Client, its officers, directors, employees,
agents and representatives, accountants and counsel including this letter to
serve as the Client's financial advisor and marketing agent.
4. Regulatory Filings. The Client will cause appropriate offering documents
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to be filed with all regulatory agencies including, the Securities and Exchange
Commission ("SEC"), the National Association of Securities Dealers ("NASD"),
Office of Thrift Supervision ("OTS") and such state securities commissioners as
may be determined by the Client.
5. Agency Agreement. The specific terms of the conversion services,
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conversion offering enhancement and syndicated offering services contemplated in
this letter shall be set forth in an Agency Agreement between KBW and the Client
to be executed prior to commencement of the offering, and dated the date that
the Client's Prospectus is declared effective and/or authorized to be
disseminated by the appropriate regulatory agencies, the SEC, the NASD, the OTS
and such state securities commissioners and other regulatory agencies as
required by applicable law.
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March 25, 1998
Page 3 of 5
6. Representations, Warranties and Covenants. The Agency Agreement will
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provide for customary representations, warranties and covenants by the Client
and KBW, and for the Client to indemnify KBW and their controlling persons (and,
if applicable, the members of the selling group and their controlling persons),
and for KBW to indemnify the Client against certain liabilities, including,
without limitation, liabilities under the Securities Act of 1933.
7. Fees. For the services hereunder, the Client shall pay the following fees
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to KBW at closing unless stated otherwise:
(a) Management Fee:
A Management Fee of $40,000 payable in four consecutive monthly
installments of $10,000 commencing with the signing of this letter.
Such fees shall be deemed to have been earned when due. Should the
Conversion be terminated for any reason not attributable to the action
or inaction of KBW, KBW shall have earned and be entitled to be paid
fees accruing through the stage at which point the termination
occurred. This Management Fee shall be applied against the Success Fee
described below.
(b) Success Fee:
A Success Fee of 0.80% of the aggregate Purchase Price of Common Stock
sold in the Subscription Offering and Community Offering excluding
shares purchased by the Client's officers, directors, or employees (or
members of their immediate families) plus any ESOP, tax-qualified or
stock based compensation plans (except IRA's) or similar plan created
by the Bank for some or all of its directors or employees.
8. Additional Services. KBW further agrees to provide financial advisory
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assistance to the Client for a period of one year following completion of the
Conversion (conversion closing date), including formation of a dividend policy
and share repurchase program, assistance with shareholder reporting and
shareholder relations matters, general advice on mergers and acquisitions and
other related financial matters, without the payment by the Client of any fees
in addition to those set forth in Section 7 hereof. Nothing in this Agreement
shall require the Client to obtain such services from KBW. Following this
initial one year term, if both parties wish to continue the relationship, a fee
will be negotiated and an agreement entered into at that time.
9. Expenses. The Client will bear those expenses of the proposed offering
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customarily borne by issuers, including without limitation, regulatory filing
fees, SEC, "Blue Sky," and NASD filing
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March 25, 1998
Page 4 of 5
and registration fees; the fees of the Client's accountants, attorneys,
appraiser, transfer agent and registrar, printing, mailing and marketing and
syndicate expenses associated with the Conversion; the fees set forth in Section
7; and fees for "Blue Sky" legal work. If KBW incurs expenses on behalf of
Client, Client will reimburse KBW for such expenses.
The Client will reimburse KBW's reasonable out-of-pocket expenses (not to exceed
$10,000 without prior approval of Client), including costs of travel, meals and
lodging, photocopying, telephone, facsimile and couriers, and reasonable fees
and expenses of counsel not to exceed $35,000. The selection of such counsel
will be done by KBW, with the approval of the Client.
10. Conditions. KBW's willingness and obligation to proceed hereunder shall be
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subject to, among other things, satisfaction of the following conditions in
KBW's opinion, which opinion shall have been formed in good faith by KBW after
reasonable determination and consideration of all relevant factors: (a) full and
satisfactory disclosure of all relevant material, financial and other
information in the disclosure documents and a determination by KBW, in its sole
discretion, that the sale of stock on the terms proposed is reasonable given
such disclosures; (b) no material adverse change in the condition or operations
of the Client subsequent to the execution of the agreement; and (c) no adverse
market conditions at the time of offering which in KBW's opinion make the sale
of the shares by the Company inadvisable.
11. Benefit. This Agreement shall inure to the benefit of the parties hereto
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and their respective successors and the parties indemnified pursuant to the
terms and conditions of the Agency Agreement and their successors, and the
obligations and liabilities assumed hereunder by the parties hereto shall be
binding upon their respective successors provided, however, that this Agreement
shall not be assignable by KBW.
12. Definitive Agreement. This letter reflects KBW's present intention of
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proceeding to work with the Bank on its proposed conversion. It does not create
a binding obligation on the part of the Client or KBW except as to the agreement
to maintain the confidentiality of non-public information set forth in Section
3, the payment of certain fees as set forth in Section 7(a) and 7(b) and the
assumption of expenses as set forth in Section 9, all of which shall constitute
the binding obligations of the parties hereto and which shall survive the
termination of this Agreement or the completion of the services furnished
hereunder and shall remain operative and in full force and effect. You further
acknowledge that any report or analysis rendered by KBW pursuant to this
engagement is rendered for use solely by the management of the Client and its
agents in connection with the Conversion. Accordingly, you agree that you will
not provide any such information to any other person without our prior written
consent.
KBW acknowledges that in offering the Client's stock no person will be
authorized to give any information or to make any representation not contained
in the offering prospectus and related
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March 25, 1998
Page 5 of 5
offering materials filed as part of a registration statement to be declared
effective in connection with the offering. Accordingly, KBW agrees that in
connection with the offering it will not give any unauthorized information or
make any unauthorized representation. We will be pleased to elaborate on any of
the matters discussed in this letter at your convenience.
If the foregoing correctly sets forth our mutual understanding, please so
indicate by signing and returning the original copy of this letter to the
undersigned.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇ & COMPANY
a DIVISION OF ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
/s/ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
PULASKI BANK, A FEDERAL SAVINGS BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ President and CEO
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EXHIBIT A
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CONVERSION SERVICES PROPOSAL
TO PULASKI BANK, A FEDERAL SAVINGS BANK
KBW provides thrift institutions reorganizing from a mutual holding company to a
full stock form of ownership with a comprehensive program of conversion services
designed to promote an orderly, efficient, cost-effective and long-term stock
distribution. The following list is representative of the conversion services,
if appropriate, we propose to perform on behalf of the Bank.
General Services
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Assist management and legal counsel with the design of the transaction
structure.
Analyze and make recommendations on bids from printing, transfer agent, and
appraisal firms.
Assist officers and directors in obtaining bank loans to purchase stock, if
requested.
Assist in drafting and distribution of press releases as required or
appropriate.
Conversion Offering Enhancement Services
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Establish and manage Stock Information Center at the Bank. Stock Information
Center personnel will track prospective investors; record stock orders; mail
order confirmations; provide the Bank's senior management with daily reports;
answer customer inquiries; and handle special situations as they arise.
Assign KBW's personnel to be at the Bank through completion of the Subscription
and Community Offerings to manage the Stock Information Center, meet with
prospective shareholders at individual and community information meetings,
solicit local investor interest through a tele-marketing campaign, answer
inquiries, and otherwise assist in the sale of stock in the Subscription and
Community Offerings. This effort will be lead by a Principal of KBW.
Create target investor list based upon review of the Bank's depositor base.
Provide intensive financial and marketing input for drafting of the prospectus.
Conversion Offering Enhancement Services - Continued
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Prepare other marketing materials, including prospecting letters and brochures,
and media advertisements.
Arrange logistics of community information meeting(s) as required.
Prepare audio-visual presentation by senior management for community information
meeting(s).
Prepare management for question-and-answer period at community information
meeting(s).
Attend and address community information meeting(s) and be available to answer
questions.
Broker-Assisted Sales Services.
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Arrange for broker information meeting(s) as required.
Prepare audio-visual presentation for broker information meeting(s).
Prepare script for presentation by senior management at broker information
meeting(s).
Prepare management for question-and-answer period at broker information
meeting(s).
Attend and address broker information meeting(s) and be available to answer
questions.
Produce confidential broker memorandum to assist participating brokers in
selling the Bank's common stock.
Aftermarket Support Services
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KBW will use their best efforts to secure market making and on-going research
commitment from at least three NASD firms.
Post-Conversion Financial Advisory Services
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KBW will assist Client with shareholder enhancement efforts post conversion.
Such efforts will include assistance with dividend policy, share repurchases,
and general merger and acquisition advisory services.